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All five were winched out of the area by helicopter as darkness fell. A short time later they were transported to hospital by road ambulance.

Police said the women and children were being given all the support they need, including medical assessments.

They thanked search and rescue teams and helicopter crews from Rotorua and Taupo for their commitment and expertise throughout the search.

"We would also like to thank Te Uru Taumatua for hosting police and media at Te Kura Whare in Taneatua," police said.

"Tuhoe knowledge of the terrain was invaluable in the search for the walking party. Once again, police are pleased there has been a successful conclusion to the search and rescue efforts."

Rotorua's Baytrust Rescue Helicopter conducted the initial search overnight. It was also instrumental in today's operation, conducting aerial searches and dropping LandSAR and other volunteers into the area.

Taupo's Greenlea Rescue Helicopter was called in to take over flying duties this afternoon.

Immediately after the rescue service handed over, word was received that the missing party had been located.

They were reportedly in a steep ravine between a couple of waterfalls.

The Greenlea Helicopter dropped a LandSAR volunteer into the area by longline. The volunteer had a bag of harnesses which were used to sling the missing party out to safety in three loads. The air rescue was completed shortly before the onset of darkness.

The four children and one adult were extremely cold and were treated in a waiting ambulance before being transported to hospital, the helicopter service said.

This afternoon, police confirmed all members in the group had been located.

Authorities made the announcement just after 4pm - almost 48 hours after they had entered the bush on Tuesday afternoon.

"So I'm actually really pleased to say that about 30 minutes ago, we were advised that all five missing people have been found," Eastern Bay of Plenty Area Commander Inspector Kevin Taylor told a 4.15pm news conference in Taneatua.

The group were all safe and well, and were being winched out of a riverbed and taken to Lion's Hut to receive medical attention.

It appeared the group had gone down an un-named track to a riverbed that was in the middle of the search zone.

"And the scenario is actually what LandSAR (Land Search and Rescue) predicted had probably happened, that they would have dropped down to look for water, and ended up in a riverbed between a couple of waterfalls.

The group were all safe and well, and were being winched out of a riverbed and taken to Lion's Hut to receive medical attention. Photo / Katee Shanks

"We believe they're all alive and we believe that their condition is okay for what they've been through."

Police had been communicating with the group's families, two of which were at the scene.Another relative was flying in from Perth, he said.

Mr Taylor described the area in which they were found as rugged, steep, covered in forest canopy and difficult to search.

"As soon as we found out about it at 4pm we launched a major search and we carried on that search throughout the night, supported with helicopters.

"And that same search has carried on today with 11 teams in the bush.

"It's just really pleasing to find them before we hit that third night."

The alert had been raised by the person who was supposed to have picked the group up and Mr Taylor was unsure why there had been a delay in alerting the authorities.

"Our focus since we became aware has been really identifying the search zone... I suppose now we've got an excellent outcome, we can go back and ask a few more questions, but now it's about finding those people."

The woman and children - aged between 4 and 9 years old - were found about 3.45pm today.

They were reported missing about 4pm yesterday after spending a night in the bush.

They had been dropped off at the spot about 1pm on Tuesday for what was meant to be a one or two-hour walk.

Taylor thanked police officers and LandSAR volunteers who had worked tirelessly in the search.

"We are hugely relieved that the group have been found safe and that we are able to return them to their family.''

Police also acknowledged the help and support of the people of Tuhoe, as well as help from the NZ Defence Force.